[LIS-Forum] Tax Obligations of Libraries on the Subscriptions/Purchase of e-Journals & e-Books

Sathyanarayana NV sathya at informaticsglobal.com
Fri Nov 18 15:17:00 IST 2016


E-Content (e-books & e-Journals) delivered online by Indian companies and
received online by Indian libraries has been under the levy of service tax
for several years now.  This service is covered under the nomenclature
“Online Information and Database Access or Retrieval (OIDAR)”.



However, the OIDAR service provided by foreign companies was kept outside
the levy of service tax until now. Organizations administered by
Government, Local Authority, or Government Authority and individuals were
exempted from service tax on import of any services including OIDAR from
foreign entities.  This exemption is removed now.  Amendments issued
recently by the Service Tax Department through a set of four notifications
46/2016-ST, 47/2016-ST, 48/2016-ST and 49/2016-ST dated 9th November 2016
has resulted in the withdrawal of exemption.



Effective 1st December 2016 all purchases/subscriptions for
e-books/e-journals/databases by persons and organizations in India, whether
offered by an Indian entity or a foreign entity, and irrespective of the
place it is offered from, will attract service tax at the current rate of
15%.  This will no-doubt increase the burden of already strained budget of
our libraries. But, it will bring the OIDAR services offered by Indian
companies and foreign companies on parity for taxation.  Purely from the
Government’s taxation benefit perspective, foreign companies too will have
to pay tax to Indian Government when they do business with Indian
organizations.



Content and language of the amendments issued through a set of
notifications mentioned above and other related amendments to various
provisions of Service tax rules are quite complex for non-tax professionals
like us to understand and interpret easily.  For this reason, we have
requested our tax consultants to prepare a note on these amendments in a
simple language which will be posted on our Company website soon.



The e-content purchase by libraries whether from local providers/vendors or
foreign providers/vendors will now attract two types of taxes:

1.     Service tax at 15%

2.     TDS at 10%  (The library is expected to deduct this amount and pay
the income tax authorities which can be re-claimed by the suppliers of
e-books/e-journals from their respective Governments while filing  tax
returns.



We at Informatics have been quite vocal about the need for strict
compliance of the laws of the land by both suppliers and receivers of the
goods & services as applicable from time to time.  We will be happy to
assist libraries in the process of understanding the procedural
requirements involved with the compliance of tax laws as applicable to
e-content purchased by libraries.



*|*N. V. Sathyanarayana*|*Informatics India Ltd.*|*Bangalore 560004*|*INDIA
*|*

*|**www.informaticsglobal.com <http://www.informaticsglobal.com/>**|*

-- 
*Confidentiality Notice: *T*his electronic message transmission, including 
any attachment(s), may contain confidential, proprietary, or privileged 
information from Informatics Publishing Limited. If you are not the 
intended recipient, be advised that any dissemination, copying, 
distribution, printing or use of the contents of the information contained 
in this electronic message is strictly prohibited. If you have received 
this electronic message by error, please destroy all copies of the message 
and contact the sender immediately by either replying to this message or 
calling 91-80-40387777.*

-- 
This message has been scanned for viruses and
dangerous content by MailScanner, and is
believed to be clean.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://ncsi.iisc.ernet.in/pipermail/lis-forum/attachments/20161118/93596e33/attachment.html>


More information about the LIS-Forum mailing list